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  • FIRST POST
    • MSE Jenny
    • By MSE Jenny 1st Mar 12, 3:18 PM
    • 1,221Posts
    • 3,555Thanks
    MSE Jenny
    Extend Your Lease guide discussion
    • #1
    • 1st Mar 12, 3:18 PM
    Extend Your Lease guide discussion 1st Mar 12 at 3:18 PM



    Hi all, we've written a new Extend Your Lease guide to help you extend at a fair price.

    How did you find the info? If you've done it, how did it go and do you have any other tips you'd add? How much value do you think it added to your property?

    Thanks
    for your help!


    MSE Jenny

    Last edited by MSE Jenny; 02-03-2012 at 12:59 PM.
Page 32
    • keveen
    • By keveen 30th Nov 17, 5:50 PM
    • 125 Posts
    • 66 Thanks
    keveen
    Depends on what the statutory costs are - can be many shocking thousands plus he will also have to pay their legal costs which can become huge if there is any other dispute. I know people who have made very reasonable informal arrangements but that was some years ago! It is a trade off of course against the eventual selling price of the leasehold interest (remember you don't own anything except that). If the flat sale will cover all the fees fine.

    In fact you are extending the lease just at the right time because if it dips below 80 years the costs increase by startling amounts and you have a declining asset.
    Last edited by keveen; 30-11-2017 at 5:52 PM.
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
    • rustyfox
    • By rustyfox 14th Jan 18, 8:29 PM
    • 1 Posts
    • 0 Thanks
    rustyfox
    Rusty
    Hi,
    I have just read your feedback to several of the comments on this thread and would like to connect with you for some advice on my lease extension process and how to start it.
    I have a flat valued at around £460k with only 62 years remaining on the lease. I have approached the leaseholder who has responded with a valuation of £70,000 for an extension of 90 years!!! This is the most expensive lease extension I have ever heard of and would like to know how to go about the negotiation process.
    I am happy to pay for good advice. Please can you help?
    • eddddy
    • By eddddy 14th Jan 18, 9:11 PM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy
    Hi,
    I have just read your feedback to several of the comments on this thread and would like to connect with you for some advice on my lease extension process and how to start it.
    I have a flat valued at around £460k with only 62 years remaining on the lease. I have approached the leaseholder who has responded with a valuation of £70,000 for an extension of 90 years!!! This is the most expensive lease extension I have ever heard of and would like to know how to go about the negotiation process.
    I am happy to pay for good advice. Please can you help?
    Originally posted by rustyfox
    A person to pay for good advice would be a lease extension valuer - perhaps a person/firm that is accredited by the RICS.

    It sounds like your freeholder has offered you an informal ease extension for £70k, so you can make a counter offer, if you want. (Be very careful about ground rent terms. Bad ground rent terms could make your flat unmortgageable.)

    Or you can take the formal route, and serve notice on the freeholder.

    Use an online calculator to get an idea of what a statutory lease extension would cost: For example: https://www.lease-advice.org/calculator/

    There's also some good info here: https://www.lease-advice.org/advice-guide/lease-extension-getting-started/
    • GTG
    • By GTG 15th Jan 18, 1:19 AM
    • 423 Posts
    • 56 Thanks
    GTG
    Rustyfox, in view of the value of your flat and the number of unexpired years on your lease you will probably find that, that valuation is not far off what you will have to pay if you agree to a peppercorn rent. However, it may be a little less depending upon what ground rent you agree too. As per edddys advice watch out for exorbitant rents being included and/or an unreasonable escalation clause. Having said that, it is your solicitor's job to inform you of anything onerous in the legal paper.

    Last time I looked there were two ways to extend a lease. One is by a private agreement with the landlord, which is what you appear to be engaging in now. The second and the best method imo is to go down the statutory route and serve notice on the landlord. I say the best because this way you have the protection of the statute. What do I mean by that? There is a set procedure in which the landlord must act in timely manner and if there is any dispute it may be referred to a valuation tribunal. I understand that negotiating outside of the statute there is no recourse to these things if the landlord does not want to act in a fair manner. If that were the case you would have to use the statute anyway. In fact, I think the reason why the act was introduced was to protect leaseholders from unscrupulous landlords.

    The only way to ensure that you are paying a fair price is to employ a professional valuer i.e. someone who is a member of the Royal Institute of Chartered Surveyors (RICS). You will have to do this anyway if you take the formal route. I understand the landlord nominates the surveyor and you will be responsible for both the surveyors and landlords solicitors fees. You will also need your own solicitor for the legal work.

    The lease advice site that eddddy pointed out is an excellent resource. Last time I looked they provided lists of solicitors experienced in this work and I think also RICS valuers. If not, just go to RICS website. Furthermore, you should get all your questions answered there. They also have a free legal helpline but expect to have to sit in a long queue before your call is answered.
    Last edited by GTG; 15-01-2018 at 1:22 AM.
    • curious_badger
    • By curious_badger 26th Jan 18, 12:04 PM
    • 80 Posts
    • 18 Thanks
    curious_badger
    Looking for some views/advice please -

    I have 83 years unexpired on my leasehold flat which is valued at £159,000

    Myself and solicitor are currently informally negotiating with the landlord - who has offered £6,800 as a premium for a 125 year lease, with ground rent rising by £200 every 10 years.

    Solicitor says that the 10years/£200 is extortionate and we could propose the following:

    0-25 years: £200
    25-50 years: £400
    50-75 years: £600
    75-100 years: £800
    100-125 years: £1000

    For best interests, the lease would need to be renewed when it hits marriage value of 80 years, so between 25-50 years time, so the maximum ground rent that should be payable is £400.

    My concerns:
    1) The premium (£6,800) is too high, but I have no basis to judge (the calculator confuses me as I am unsure what the value of my property would be with the extension in place).
    2) Whether I should serve notice and get peppercorn ground rent (However, I do understand that serving notice would involve further expense/time and more potential headaches).

    So, for those reasons I would prefer to informally resolve if my above counter offer is (for my best interests) reasonable enough. My problem is, I have no idea if I should be asking for more/just serve notice. Thanks
    Last edited by curious_badger; 26-01-2018 at 12:09 PM.
    • keveen
    • By keveen 26th Jan 18, 5:57 PM
    • 125 Posts
    • 66 Thanks
    keveen
    At least your solicitor is on your side. He/she is right. Also the formal route is recommended to get your groundrent reset to zero. And actually the government should announce changes in the summer that might make the lives of leaseholders easier. Best info:
    https://www.leaseholdknowledge.com
    https://www.moneysavingexpert.com/mortgages/extend-your-lease
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
    • keveen
    • By keveen 26th Jan 18, 6:04 PM
    • 125 Posts
    • 66 Thanks
    keveen
    Hi,
    I have just read your feedback to several of the comments on this thread and would like to connect with you for some advice on my lease extension process and how to start it.
    I have a flat valued at around £460k with only 62 years remaining on the lease. I have approached the leaseholder who has responded with a valuation of £70,000 for an extension of 90 years!!! This is the most expensive lease extension I have ever heard of and would like to know how to go about the negotiation process.
    I am happy to pay for good advice. Please can you help?
    Originally posted by rustyfox
    Because the lease term is below 80 years that could very well be the correct amount. The way the rotten law works to calculate what you pay is stacked in favour of the freeholder and comes out at insane amounts of money that many people cannot afford.
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
    • ra111
    • By ra111 26th Jan 18, 6:27 PM
    • 2 Posts
    • 0 Thanks
    ra111
    Extending lease when you own share of freehold
    Hi,

    Sorry if I'm completely missing something but can someone please point me in the right direction?
    When you own share of freehold, along with one other flat and want to extend your lease, what costs are incurred?
    I know there will be legal fees, but are the rest of the costs relevant, because I have "heard" that you just have to pay the legal charges (which of course could be split between the two flats in the agreement) but never seen that advised anywhere online/anything I've read.

    Does anyone have any experiences as to how much the legal fees might come to?

    Thank you in advance.
    • miller3653
    • By miller3653 26th Jan 18, 6:32 PM
    • 7 Posts
    • 3 Thanks
    miller3653
    If you have a share of the the freehold, there surely is no need to extend the lease.
    • ra111
    • By ra111 27th Jan 18, 12:41 AM
    • 2 Posts
    • 0 Thanks
    ra111
    If you have a share of the the freehold, there surely is no need to extend the lease.
    @miller3653 thanks for replying.
    So when you have share of freehold, you own the property in two capacities... for example the flat we're looking at is the ground floor in a converted terrace house. We would be owning the freehold for the building with the upstairs.
    So building insurance, roof /common area repairs etc all falls to us 50/50.
    We are also leaseholders of the downstairs flat. Because we don't hold that completely freehold and our freeholders are essentially us and the upstairs neighbours.

    Sorry it's really complicated to try to explain.
    It means that you do end up with a lease though usually because you have a lot more control in that situation, people would just increase it to 999 years which makes it easier/not have to worry about getting into short leases.
    Concern is that this property is on 87 years and I can't find out anywhere what the costs are (if any) for renewing a lease beyond legal fees (which I'm not sure how much they'd be but hopefully they'd be halved anyway as upstairs also have 87 years on their lease so makes sense if we do it at the same time) for a share of freehold property ...
    • eddddy
    • By eddddy 27th Jan 18, 1:00 AM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy

    Sorry it's really complicated to try to explain.
    It means that you do end up with a lease though usually because you have a lot more control in that situation, people would just increase it to 999 years which makes it easier/not have to worry about getting into short leases.

    <snip>
    Originally posted by ra111
    Because you and your neighbour jointly own the freehold, you can agree between you to extend the leases to 999 years, if you want. (But equally, one of you can object - perhaps to get money out of the other party.)

    Assuming you both agree, you need to get a solicitor to draw up a Deed of Variation for each lease. You will probably also need a Deed of Substituted Security for your mortgage lender.

    You can ask a few solicitors for quotes for dealing with one flat, and for dealing with both - to see if they will give you a discount, for doing both together.
    • sukavi2011
    • By sukavi2011 5th Feb 18, 9:38 PM
    • 49 Posts
    • 66 Thanks
    sukavi2011
    Hi all, am looking for a little advice. I have recently moved into a flat with 89yr lease, by time it comes to extend will be 87yr. Property value is currently around 260k. I have used the lease calculator and it says 6-8k for 90yrs. I am wondering what the situation might be in around 18 months time. If the government are making changes this year then hopefully this will be for the better. Then there was the issue of appointing solicitor etc. I was thinking of asking same one I bought and sold last/this property, but obviously would make sense to get several comparisons. My property is ex local authority hence they are the freeholders. I see this as possibly a good thing but may be wrong. Any advise much appreciated
    • eddddy
    • By eddddy 5th Feb 18, 11:24 PM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy
    I was thinking of asking same one I bought and sold last/this property, but obviously would make sense to get several comparisons.
    Originally posted by sukavi2011
    Lease extensions are quite a specialist area. Does your conveyancing solicitor also specialise in this area?

    I would go for a solicitor with good past experience in lease extensions.
    • Trung_UK
    • By Trung_UK 7th Feb 18, 8:40 PM
    • 4 Posts
    • 0 Thanks
    Trung_UK
    Shared Ownership: Staircasing vs Lease running low
    Is anyone able to help me please with my question?

    I think I have 83 years left on my leasehold on a shared ownership property (house) but my final goal is to purchase the property outright including freehold. (lived here for 3+ years)

    If I let my lease run lower than 80 years how does that effect the costs of buying 100% and the freehold (or if I can't then staircasing on leasehold).

    Does this mean that the longer I leave the lease, the cheaper it is for me to buy the property?

    I could really use some help please. I'm new so can't post links but I did create a thread which is below.

    http://
    forums.moneysavingexpert.com/showthread.php?t=5785643&highlight=lease+staircasi ng

    or search "Shared Ownership: Staircasing vs Lease running low" on the forum.

    Many Thanks
    • eddddy
    • By eddddy 8th Feb 18, 8:23 AM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy
    I think I have 83 years left on my leasehold on a shared ownership property (house) but my final goal is to purchase the property outright including freehold. (lived here for 3+ years)

    If I let my lease run lower than 80 years how does that effect the costs of buying 100% and the freehold (or if I can't then staircasing on leasehold).

    Does this mean that the longer I leave the lease, the cheaper it is for me to buy the property?
    Originally posted by Trung_UK
    Different housing associations have different rules. So it's best to ask yours. I suspect they have 'fact-sheets' that explain this - or the information might even be on their website.
    • kadirayoob
    • By kadirayoob 8th Feb 18, 11:10 AM
    • 5 Posts
    • 0 Thanks
    kadirayoob
    Lease Guide
    Quite helpful, but would you rather increase the length of your lease or sell it off and buy a new one. I would recommend that you buy a new home, over a period of time a home becomes old and begins to have faults in it. Hence it is better you sell this one off and add the lease to the new one. You might end up saving some money this way.
    • heathdene
    • By heathdene 9th Feb 18, 3:06 PM
    • 10 Posts
    • 0 Thanks
    heathdene
    Lots of different info ??
    Hi


    I am currently looking at extending my Lease.


    Current length is 64 yrs


    Value of 2 bed flat is £195k


    Freeholder tells me that I need to send a payment of £350 in order for them to give me a renewal valuation.


    A solicitor who family member used to work for told me to make the payment and see what their valuation is and then maybe instruct our own surveyor. He gave me details of the surveyor they've used in the past who now tells me that I should hold off from paying the £350 and directly contest the cost of the renewal.


    It seems that everyone in from my position to solicitors has different experiences with this and there seems to be no set rules in approaching and dealing with this.


    Any advice greatly appreciated.
    • eddddy
    • By eddddy 9th Feb 18, 4:37 PM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy
    It seems that everyone in from my position to solicitors has different experiences with this and there seems to be no set rules in approaching and dealing with this.
    Originally posted by heathdene
    There are 2 approaches to extending a lease:

    1. Statutory lease extension
    2. Informal lease extension

    With an informal lease extension - You're correct, there are no rules. The freeholder can ask for any fee they like, and then ask for any price they like. Similarly, you can make any offer you like.

    So the freeholder might charge you £350 and then give you a valuation of £100,000 to extend the lease. And you can counter-offer £500, if you want.

    ... and you might never reach an agreement.


    With a statutory lease extension - there are rules. But it's more expensive - total fees could be around £4k. And it will probably take longer - 6 to 18 months. And a definite price will be agreed.

    You could start by reading this: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/
    • MHF123
    • By MHF123 2nd Mar 18, 12:43 PM
    • 3 Posts
    • 0 Thanks
    MHF123
    Extending Lease when own share of freehold
    Hi there,
    I wonder if you can help. I am one of 8 flats in my building who all own equal shares in our freehold. We own it via a management company (in which we have equal shares) that was set up to own the freehold as I understand that private individuals are unable to own freeholds (or at least they were at the time that this was set up). We are also all lessees and our leases have now all fallen below 70 years so we need to extend them fairly rapidly. We all thought this would be a simple matter of paying a lawyer to sort out the paperwork seeing as we are all effectively asking for lease extensions from ourselves. However after seeking initial advice, it appears that we may have to charge ourselves the market value for the lease extensions which could be as much as £50-60k per flat! Although we could then reimburse the money to ourselves from the management company via dividends, apparently we will have to pay corporation tax on the lease income that the company gains and then capital gains tax as individuals on the value of the leases that we have granted ourselves, so we get double-taxed to the tune of some £20k or more. Surely there must be some way round this? Aren't there "share of freeholders' with management companies set up to hold their freehold all over the country who have had to deal with this same issue when they come to extending their leases? How do they normally sort this out?
    • eddddy
    • By eddddy 2nd Mar 18, 1:41 PM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy
    However after seeking initial advice, it appears that we may have to charge ourselves the market value for the lease extensions which could be as much as £50-60k per flat!
    Originally posted by MHF123
    Who gave you this advice? Did they say why they are advising this?

    Is it something to do with different flats having different lease lengths - perhaps because some flats paid for lease extensions before the freehold was bought?

    Or perhaps because flats are different sizes, and therefore different values?
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